A few weeks ago, I thought the market was oversold enough and sentiment was bearish enough for us to rally into the end of the quarter and the July 4 weekend. What really happened was we sold off into the end of the quarter and we have not had a down day since the calendar turned to the third quarter.

Now we have four-straight days of green for the S&P 500, something that hasn't happened since March. We have not seen the S&P go to five since November, so if we do go to five, that would be a change in the pattern of the market.

Nasdaq has already seen a pattern change. There has been a downtrend line in place since early April and Nasdaq (and the Invesco (QQQ) ) crossed that downtrend line on Thursday. They both stopped right at the still-declining 50-day moving average. That means not only is Friday a big test for the S&P (does it go five days of green?), it is a big test for Nasdaq and the QQQs. Does it cross the 50-day moving average line, something it hasn't done once in the second quarter?

There will be complaints about Thursday's rally, as there should be. Breadth was good, but for all the hoopla the New York Stock Exchange could not eke out more than 89% of the volume on the upside. Also, so much of the action was in the stuff that was really down and out, like energy (about time it rallied). And the fact that the put/call ratio chimed in at .81, the lowest reading since April 4. And, yes, early April was the end of that particular rally.

In fact if we look at the 10-day moving average of the put/call ratio, we can see something changed here too: It made a lower low for the first time since it "bottomed" in late 2021. So, despite all the "sentiment tourists" chattering on about the American Association of Individual Investors being so low on the bull side, folks have actually been warming up to the market for a few weeks now. (Also, AAII was technically low on the bull side, but the voting ends on Tuesday, which was down hard in the morning, so if we don't fall apart between now and Tuesday expect to see a big jump in bulls.)

Then there is the VIX put/call ratio, which we looked at Wednesday. Wednesday's reading was .17, which is the lowest reading since January 2020.

Prior to that time, those one-day readings under .20 were bullish for the next one to three days. We have not had a reading that low in so long that I am hesitant to say what they mean (although based on Thursday's action, it is still bullish for the next one to three days).

But I am focused on the 21-day moving average, which is low and falling. It hasn't stopped going down yet but this moving average speaks of the persistence of the VIX call buyers and we typically do not treat them as contrarians. When it turns up, it will signal to me that these folks are looking for the VIX to rally shortly.

Note: Meisler will be on vacation for the next week. Her next column will be Monday, July 18.

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We saw a productive day of technical action that made up for the lack of a fifth day of rallying.

The stock appears out of the woods for now.

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